notice of assignment of debt qld

• Stonegate Legal FAQ

Commercial Litigation

• Building & Construction
• Debt Recovery/Collection
• Body Corporate Debt Recovery Lawyer

Corporations Disputes

Commercial Lease Disputes

Tax Debt Disputes

• Civil / Personal Litigation
• Defamation Litigation

Wills / Estate Litigation

Insolvency Law

Statutory Demands

Litigation Services

• News & Articles

Debt Assignment in Queensland – A Complete Guide

Home » News & Articles » Debt Assignment in Queensland – A Complete Guide

NEWS & ARTICLES

• By Wayne Davis
• | September 17, 2023

Article Summary

A debt assignment is an agreement where a debt, along with all its associated legal rights and responsibilities, is transferred from the original creditor to a third-party purchaser. Once verified, the third party, now termed the assignee, becomes the official owner of the debt and has the right to collect it.

A “chose in action” or a “thing in action” is a legal term referring to a personal or proprietary right in intangible personal property, enforceable through litigation. This is different from “chose in possession”, or a “thing in possession” which refers to tangible items one can physically possess, like a book or car.

The legislation in Queensland, specifically the Property Law Act 1974 (Qld), provides for assignments of things in action.

An absolute debt assignment refers to the unconditional transfer of property or rights, ensuring the original owner retains no interest. The assignment should be complete for clarity between the debtor and the new creditor.

Before the new creditor can collect the debt, a formal notice must be issued to the debtor. This ensures the debtor knows they have a new creditor. Requirements for a valid notice include it being in writing, signed by the assignor, and containing clear identification of the assignor, assignee, and the debt.

The responsibility of ensuring a valid notice falls on the assignee. Several guidelines and legal cases have highlighted the importance of serving the notice in a manner that is most likely to bring it to the debtor’s attention. This could involve registered post or personal delivery.

Once the debt is effectively assigned and the debtor notified, the assignee can collect the debt and undertake any necessary legal actions. Often, debts that are assigned come with their own challenges, as many are sold precisely because they are problematic.

Legal avenues like court proceedings, enforcement warrants, or bankruptcy can be pursued. Challenges may arise due to misunderstandings by the debtor, disputes about the validity of the assignment, or challenges proving effective delivery of the notice to the debtor.

Table of Contents

Are you a creditor in Queensland who is struggling with debt assignment and is looking for a way to effectively manage the assignment of their debts?

Dealing with debt can sometimes be a lot for creditors to manage. Between the multiple debts that their business will likely manage and potential problem debtors who don’t seem to want to pay their debt, debts can sometimes spiral out of control!

If this is the case for you or your business, it may be time to consider assigning your debt.

The assignment of a debt occurs when the creditor of a debt sells their debt to a third-party buyer. This process can be complicated to understand, so it is important that you perform due diligence and research before engaging in this process.

Typically seen with banks and credit card companies, creditors will sometimes package their debts into debt books or tranches and sell them, rather than collecting them.

In this article our debt recovery lawyers will discuss the basics of debt assignment in Queensland so that you, as a creditor, can better understand this process.

What is a Debt Assignment?

The first question that is to be asked about debt assignment is what it is and how it works?

A debt assignment is an agreement that transfers a debt , and all of the legal rights and responsibilities associated with it, from the creditor to a third-party purchaser.

This provides the third party with the right to collect the debt, while the creditor can no longer engage in the debt recovery process with the debt assigned.

Once an assignment of debt is verified, the rights will be transferred to the assignee and they will be the official owner of the debt, meaning that they can collect the debt for the money it is worth.

Chose in Action (Thing in Action)

The right to recover a debt is a “thing in action” or a “chose in action”.

A “chose in action” (often referred to as a “thing in action”) is a legal term that denotes a personal right without possession, or a proprietary right in personal property that is intangible and not in one’s possession, but enforceable through litigation.

Common examples of choses in action include debts, shares in a company, and other rights to receive something or have something done.

Contrast this with “chose in possession” which refers to something tangible that one can physically possess, like a book, a car, or money.

The phrase “chose in action” originates from old French and the term “chose” means “thing”.

In Queensland, the assignments of things in action are provided for in legislation, particularly at section 199 of the Property Law Act 1974  (Qld) (“ the PLA ”).

Section 199 of the Property Law Act

Section 199(1) of the PLA states:

(1) Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal thing in action, of which express notice in writing has been given to the debtor, trustee or other person from whom the assignor would have been entitled to claim such debt or thing in action, is effectual in law (subject to equities having priority over the right of the assignee) to pass and transfer from the date of such notice— (a) the legal right to such debt or thing in action; and (b) all legal and other remedies for the same; and (c) the power to give a good discharge for the same without the concurrence of the assignor.

This part of the section means that a the right to recover a debt (being a thing in action) can be legally assigned. This assignment must be absolute and the debtor should receive a written notice, and obtaining the debtor’s consent for this assignment is not mandatory.

Section 199(2) of the PLA states:

(2) If the debtor, trustee or other person liable in respect of such debt or thing in action has notice— (a) that the assignment is disputed by the assignor or any person claiming under the assignor; or (b) of any other opposing or conflicting claims to such debt or thing in action; the debtor may, if the debtor thinks fit, either call upon the persons making claim to the debt or other thing in action to interplead concerning the same, or pay the debt or other thing in action into court under and in conformity with the provisions of the Act s relating to relief of trustees.

This part of the section says that if the debtor knows of disputes or conflicting claims regarding the assignment, they can either request claimants to clarify their stance or deposit the owed amount in court as per the Act’s guidelines.

These subsections raise some further questions, namely:

• What is an “ absolute debt assignment ” at law?
• What is a notice of debt assignment?

We will discuss these in further detail below.

What is an “Absolute Debt Assignment” at Law?

Absolute debt assignment refers to an unconditional transfer of property or rights, leaving no interest for the original owner.

Typically, it lets a creditor transfer their right to collect a debt to a third party. The debt assignment must be complete and without conditions for the benefit of both the debtor, who knows whom to pay, and the third party, who can legally claim the debt.

In Durham Brothers v Robertson [1898] 1 QB 765 , it was held that the document was not “an absolute assignment (not purporting to be by way of charge only)” and that the plaintiffs could not recover in the action. This was held because it was a charge. The Court said:

The document purports on the face of it to assign the debt, and it is not the less an absolute assignment because it contains, like any other mortgage, provisions that shew that it is only a security, and that there is a right to redeem. It is clear on the authorities that a mortgage with a power of redemption is an absolute assignment within the section.

In Clyne v Deputy Federal Commissioner of Taxation (1981) 150 CLR 1 , Mason J said at [24]:

An “absolute assignment” in the section signifies one which is unconditional.

In Austino Wentworthville Pty Limited v Metroland Australia Limited [2013] NSWCA 59 , Barrett JA said at [62], summarising the relevant principles emerging from the cases:

An “absolute” assignment is one that is unconditional and does not attempt to affect part only of the chose in action. The fact that an assignment otherwise absolute is accompanied by an express proviso for redemption, an implied right of redemption or the creation of a trust in respect of future proceeds does not deprive it of its absolute character. An assignment by way of charge is one the effect of which is to give a right of payment out of the subject matter assigned without outright transfer of that subject matter. Such an assignment occurs when, for example, there is a transfer of a right to be paid out of a particular fund or of so much of a debt as is sufficient to satisfy a future indebtedness. The character of the assignment must be ascertained from the terms and effect of the instrument, according to the construction of it as a whole.

So, to ascertain if the assignment is an absolute assignment, reference must be made to the contract (or deed of assignment), its terms and conditions, and read in the proper context.

Another requirement for an assigned debt to be valid is that the assignee must send a notice to the debtor.

What is a Notice of Debt Assignment?

Before the debt will be able to be collected by the new creditor, a notice of debt assignment must first be issued to the debtor. But what is this and what does it mean?

A notice of debt assignment is a formal notice that is issued to the debtor when a debt is assigned to a new creditor. The new creditor, or the assignee, must issue this notice to the debtor at their last recorded or known home address.

As a debtor, it is a sudden change to have a new creditor to whom they are making payments.

There may have to be a process of them switching details and making financial or legal arrangements to begin to make payments or to manage the debt in any other way of their choosing.

They should be provided the time to understand that they now have a new creditor, as this will likely be an unexpected change, and deal with their debt in the way that they choose, as they may have had previous arrangements or discussions with their initial creditor.

The purpose of the notice is to provide the debtor with this new information and to ensure that they begin making debt payments to the new creditor, rather than continuing to pay the previous creditor.

In Walter and Sullivan Ltd v J Murphy and Sons Ltd [1955] 1 All ER 853 , the court held that the following are the requirements of a valid notice of an assignment of a debt:

• The notice must be in writing.
• The notice must be signed by the assignor.
• The notice must identify the assignor and the assignee.
• The notice must identify the debt that is being assigned.

In Mango Boulevard Pty Ltd & Anor v Mio Art Pty Ltd & Ors [2016] QCA 148 , Fraser JA said at [34] citing the relevant authorities:

… to constitute valid notice, there must be some kind of formal notification by the assignee, or possibly by the assignor on his behalf, to the debtor in order to achieve the object described in the Walter & Sullivan case. This view is also consistent with the decision of the Court of Appeal in Talcott v John Lewis & Co Ltd [1940] 3 All ER 592, where it was held that a notice stamped by a creditor on his invoice stating that the invoice should be transferred and payment made to the assignee, was ineffective, both because it was insufficiently plain in its wording, and because it was not a notice sent by the assignee to the debtor.

Therefore, we would suggest that at a minimum, the written notice of debt assignment should include:

• A notice that it is an assignment of debt.
• The name and details of the assignor of the debt (old creditor).
• As many particulars of the original debt to enable the debtor to identify the debt to which the notice relates.
• All of the details of the assignee of the debt (new creditor).
• Direction to pay the debt to the assignee and the new payment details.
• Full particulars of the original debt amount, plus and costs and interest incurred.
• How the debtor can discharge the debt by payment.
• The assignment must be signed by the assignor.

It is important to note that the assignment does not need to be in any particular format.  However, it is advisable to have a lawyer draft the assignment to ensure that it is valid and enforceable.

After you have a valid assignment contract or deed of debt assignment signed; and you have a valid notice of assignment drafted, you must now give the notice of debt assignment to the debtor.

Proper Service of the Notice of Assignment of Debt

The notice must be valid, and it is the responsibility of the assignee to ensure that the notice is valid. The notice of assignment must be absolute and in writing, and the new creditor (or old creditor) must ensure that the notice is delivered properly to the debtor.

Section 347 of the Property Law Act 1974 (Qld) sets out the general rules for serving notices under the Act.  A notice may be served on a person:

• By delivering it personally to the person.
• By leaving it at the person’s usual place of abode or business.
• By posting it as a letter addressed to the person at their usual place of abode or business.

If the person is unknown or absent from the State, the notice may be served in such manner as directed by the court.

The Act also provides that a notice posted as a letter shall be deemed to have been served, unless the contrary is shown, at the time when by the ordinary course of post the notice would be delivered.

In Anning v Anning (1907) 4 CLR 1049 , Griffith CJ said of the then equivalent of s 199(1) that:

The section does not say by whom the notice is to be given, but it is, I think, clear that it may be given either by the assignor or the assignee.

In Grayprop Pty Ltd v Maharaj International Pty Ltd [2001] QSC 387 , it was held that the posting of a notice to a post office box did not comply with s.347 so as to attract the deeming provisions in that section relating to receipt of the notice. In that case Philippides J referred to David Sarikaya v Victorian Workcover Authority [1997] FCA 1372 , where Black CJ held:

… a post office box is not, in my view, the “address of a place” at which a document may be “left” for a person. The ordinary notion of “post office box” is of a container at a post office into which mail that has been duly posted is placed by postal authorities for retrieval by or on behalf of the holder of the box. Whether or not such a box is, in this context, the “address of a place”, it is not the address of a place at which a document may be “left” by way of service.

In Walter and Sullivan Ltd v J Murphy and Sons Ltd [1955] 1 All ER 853 , the court held that notice of an assignment of a debt must be given to a debtor in a way that is reasonably likely to bring it to their attention.

In the case, the assignor had given the debtor notice of the assignment by sending a letter to their registered office. However, the debtor had moved office and the letter was never received.

The court held that the notice was not valid because it had not been given in a way that was reasonably likely to bring it to the debtor’s attention.

Therefore, some takeaways re. service include:

• To give valid notice of an assignment of a debt, the notice must be given to the debtor in a way that is reasonably likely to bring it to their attention.
• This may involve sending the notice by registered post or delivering it in person.
• It is not enough to simply send the notice to the debtor’s registered office if the debtor has moved office and the notice is not received.

Enforcing an Assigned Debt

The debt has been assigned effectively and the notice has been delivered to the debtor. Now what?

The assignee is now entitled to collect the debt and to take any collection or legal action of their choosing.

As debts that are assigned are often somewhat problematic, as many sell problematic debts, legal action may be the choice that many take.

Commencing court proceedings and receiving and enforcing a judgement are some of the recovery options that assignees will have in the legal regard, such as enforcement warrants, bankruptcy , and issuing a statutory demand / winding up .

The recovery of an assigned debt can often raise several issues for assignees in the initial stages. There are several factors and occurrences that may cause these issues to arise, including:

• Misunderstanding of the debt assignment process by debtors, resulting in confusion or refusal to pay, as they do not understand that they are paying their debt or the same debt as before.
• As we have discussed, a debt assignment must be legal and valid. The debtor may raise a dispute regarding the validity of the assignment of debt, regardless of whether proper procedure was followed or not.
• You must be able to prove that the notice of assignment was effectively validly provided to the debtor. If you have failed to keep proper records of the formation and delivery of the notice, you may struggle to prove that it was both valid and provided.
• If the debtor had previously arranged any kind of understanding with the assignor, they may be able to take action against you for not fulfilling the arrangement, even if you were not notified about it before the sale. This, however, may constitute a breach of contract by the assignor, so you may be able to take action of your own if this turns out to be the case.

Benefits of Debt Assignment

There are several benefits for all parties involved in the assignment of debt, including;

For the Assignor:

The assignor, or the individual or party that is assigning the debt to a new creditor, benefits in several ways and circumstances by selling the debt.

For one, they will have an increased cash flow by being paid a larger piece of the debt in one payment, rather than smaller payments over an extended period, which can help them get their finances back on track or invest in their business.

They will also no longer have the risk of a debt, which may be unable to be collected due to insolvency or other reasons, mitigating risk from their business.

Furthermore, the time and resources spent dealing with the debt will no longer be required, freeing up their business resources for alternative use.

For the Assignee:

The assignee, or the new creditor of the debt, will also be privy to several benefits from the assignment of debt process.

As a debt purchaser , the chances are they will have access to resources or be experienced debt collectors who have the time and resources to focus on debt collection , increasing their chances of being paid.

They will also pay less than the debt is worth for the rights to collect it, leaving room for a large profit margin.

What to Consider in Debt Assignment

While there are many benefits that may be reaped from a debt assignment on either side of the matter, there are also some considerations that should be made.  They include;

The assignor of the debt should consider if this process is the right one for them and their business. After all, if the debt was collected regularly, they would collect more money over time, rather than being paid a larger amount of the debt immediately but not the full amount at any point in time.

The suitability of assigning a debt is something that can only be decided based on the specific circumstances of the matter and of the assignor’s business, so they should take the time to consider.

If the assignor wishes to maintain a relationship with this debtor for any reason, they should also consider notifying the debtor separately.

The assignee of the debt has several considerations to make, also regarding the suitability of this process for them. They will be taking on the responsibility of collecting a debt, which can take time and resources, so this must be feasible for them to commit to.

They are also accepting the risk of not being paid the debt at all or receiving only a small amount of it, so this must be a consideration made.

There is also a process that must be followed once the debt has been assigned, as discussed, so this should be considered as something that must be completed.

Limitation Dates for Assigned Debts

An assignee of debt must ensure that they are within the limitations of actions acts for each State and Territory to legally commence recovery of the debt.

The purpose of limitations of actions acts is to limit the delay for creditors to take action against a debtor for outstanding monies.

The limitation period for a contract debt is six (6) years in Queensland, calculated from the point of breach.

Where an assignee has been assigned a debt, the point of breach will commence from the date the debt was assigned to the assignee.

However, in some circumstances, where a debtor acknowledges the debt or makes a payment in respect of the debt, the point of breach starts from the date of acknowledgement or the last payment made by the debtor.

Common Mistakes to Avoid when Assigning Debt

There are a few things that you should avoid when assigning your debt. These include:

• Not having a written agreement : It is important to have a written agreement in place when assigning debt. This agreement should clearly identify the debt being assigned, the assignor, the assignee, and the terms of the assignment.
• Not notifying the debtor : The debtor must be notified of the assignment in writing. This notice should be given to the debtor before they make any payments to the assignor.
• Assigning debt that is not assignable : Not all debts can be assigned. For example, debts that are personal in nature, such as claims for defamation or assault, cannot be assigned.
• Failing to comply with the applicable laws and regulations : There are specific laws and regulations that govern the assignment of debt. It is important to comply with these laws and regulations to ensure that the assignment is valid.

Here are some additional tips to avoid common mistakes when assigning debt:

• Have a lawyer review the assignment agreement : A lawyer can help you to draft an assignment agreement that is valid and enforceable.
• Use a registered post to send the notice of assignment to the debtor : This will help to ensure that the debtor receives the notice and that there is a record of the notice being sent.
• Keep a copy of all documentation related to the assignment : This includes the assignment agreement, the notice of assignment, and any other relevant documents.

If you have any questions about assigning debt, you should consult with a lawyer asap.

FAQ on Debt Assignment in Queensland

Navigating the intricacies of debt assignment can be complex, given its multifaceted nature and the legal implications involved.

Whether you’re an assignor looking to transfer the rights to a debt or an assignee aiming to comprehend the dynamics of your new responsibility, it’s crucial to understand the entire spectrum of the process.

A debt assignment is a legal transfer of a creditor’s right to collect a debt to a third party, known as the assignee. Once assigned, the original creditor can no longer engage in the debt recovery process.

What is a “Chose in Action”?

A “chose in action” refers to a legal right without possession, like debts or shares in a company. It contrasts with “chose in possession,” which refers to tangible items like a car or book.

What does Section 199 of the Property Law Act 1974 (Qld) discuss?

It provides the legal framework for the assignment of things in action in Queensland, specifying that for a debt assignment to be valid, a written notice must be given to the debtor.

Do I need the debtor’s consent to assign the debt?

No, the debtor’s consent isn’t mandatory. However, they should receive a written notice of the debt assignment.

What is an “Absolute Debt Assignment” at law?

It refers to an unconditional transfer of rights, meaning the original owner retains no interest. This transfer allows the third party (assignee) to legally claim the debt.

What should a Notice of Debt Assignment include?

It should provide details about the original creditor, the assignee, specifics of the debt, payment instructions, legal implications, and the dates of assignment and notice.

Why is the notice important?

It’s a legal requirement for the assignment to be effective, ensures clear communication with the debtor, protects the assignee’s rights, and prevents potential disputes.

A Notice of Debt Assignment is a formal document sent to a debtor informing them that their debt has been transferred to a new creditor (assignee). This notice ensures the debtor makes payments to the new creditor rather than the original one.

Why is a notice of assignment of debt necessary?

It allows the debtor to understand and adapt to the unexpected change in the party to whom they owe money. It also gives them time to arrange their finances or change any existing agreements made with the original creditor.

What are the requirements for a valid Notice of Debt Assignment?

Based on legal precedents for a Notice of Debt Assignment to be valid it must be in writing; It should be signed by the original creditor (assignor); and it should identify both the assignor and the assignee; and the specific debt being assigned must be detailed.

What should be included in a well-drafted Notice of Debt Assignment?

A well-drafted Notice of Debt Assignment should include a statement clarifying it as an assignment of debt; details of the assignor (original creditor) and the assignee (new creditor); comprehensive information on the original debt, including any additional costs and interest; instructions on how to make payments to the new creditor; the method to finalise the debt payment; and the signature of the assignor.

How should the notice be served to the debtor?

For effective service, the notice should be personally delivered to the debtor; or left at their usual residence or place of business; or posted as a letter to their regular address. However, precautions should be taken regarding post office boxes as they might not comply with certain legal provisions.

What are the implications if the notice isn’t properly served?

A notice must be delivered in a manner that makes it likely to come to the debtor’s attention. Improper delivery can render the notice invalid. For instance, merely sending it to a moved office or a post office box might not suffice.

Does the format of the assignment need to be specific?

No, there isn’t a mandatory format. However, having a lawyer draft the notice ensures its validity and enforceability.

Who can issue the Notice of Debt Assignment?

Either the assignor or the assignee can issue the notice.

What does it mean when a debt is assigned?

When a debt is assigned, it means the original creditor (assignor) has transferred their rights to collect the debt to a new creditor (assignee). This transfer requires a formal notice to be given to the debtor.

After a debt has been assigned, who is responsible for collecting it?

The assignee, or the new creditor, is now responsible for collecting the debt. They can choose any legal collection method, which might include court proceedings.

What issues might arise after the assignment of a debt?

Issues can arise from misunderstandings by the debtor, challenges to the validity of the assignment, lack of proper documentation to prove the notice was provided, or previous agreements with the assignor that were not known by the assignee.

How does the assignor benefit from assigning a debt?

Assignors can benefit from an immediate influx of cash, reduction in the risk of non-collection, and a decrease in time and resources spent on collection efforts.

How does the assignee benefit from purchasing an assigned debt?

Assignees typically purchase debts at a reduced rate, giving them a chance for a higher profit margin upon collection. Additionally, experienced debt collectors might have the resources and expertise to effectively recover debts?

Are there any considerations to be made before assigning or accepting a debt?

Yes. Assignors should evaluate if debt assignment is suitable for their business situation and consider notifying the debtor separately. Assignees must weigh the commitment of resources against the potential risk of non-collection and ensure they understand and follow the necessary post-assignment processes.

Is there a time limit for the assignee to take action on a debt?

Yes. The limitation period for a contract debt is typically six years from the point of breach. However, this might vary if the debtor acknowledges the debt or makes a payment.

Are there common mistakes made during debt assignments?

Some common pitfalls include not having a written agreement, failing to notify the debtor, assigning non-assignable debts, and not adhering to relevant laws and regulations.

How can I ensure that the assignment process goes smoothly?

It’s advisable to consult with a lawyer, use registered post for notices, and keep thorough documentation of every step in the process.

Can all debts be assigned?

No. Some debts, especially those personal in nature like claims for defamation or assault, cannot be assigned. Always check the nature of the debt and legal stipulations before proceeding.

Wayne Davis

Disclaimer:  The content on this website is intended only to provide a general summary of information of interest. It is not intended to be comprehensive nor does it constitute legal advice. We attempt to ensure that the content is current but we do not guarantee its accuracy. You should seek legal or other professional advice before acting or relying on any of the content of this website. Your use of this website or the receipt of any information on this website is not intended to create nor does it create a solicitor-client relationship.

Discuss Your Case Today

• You'll get a no-fee, no-obligation 30 minute consult with a lawyer

Recent News & Articles

The defence of contextual truth in defamation, defence of honest opinion in defamation, informal service of court documents in queensland, social media defamation – complete guide, defence of qualified privilege in defamation, defence of justification (truth) in defamation in australia, claim a no obligation case evaluation, discuss your case with a trusted lawyer.

We approach your dispute with – strategic thinking, commercial solutions & positive outcomes.  Our honest process is designed to get you the best commercially sensible resolution.

Quick Links

Frequently Asked Questions

News & Blogs

• Free Case Evaluation

Individual liability limited by a scheme approved under professional standards legislation.

• Building & Construction Disputes
• Debt Recovery Lawyers
• Civil / PersonalLitigation
• Body Corporate Debt Recovery
• Wills & Estates Litigation
• Insolvency Lawyers
• Letters of Demand
• Bankruptcy Lawyers
• Drafting Credit Contracts
• Office Hours

Monday – Friday 8:30 AM – 5:00 PM

• Brisbane City

Level 10/ 95 North Quay, Brisbane City, QLD 4000 – (appointment only)

• 07 3180 0143
• Sunshine Coast - Main Office

3/ 67 Mary Street, Noosaville, QLD 4566

• 07 5346 0366

At Stonegate Legal, client satisfaction is our top priority. We are proud to have served hundreds of clients who have had positive experiences working with us.

Copyright © 2023  Stonegate Legal  Pty Ltd – All Rights Reserved – Stonegate Legal® is a registered trademark |  Terms |   Privacy  |  Sitemaps  |  *Conditions Apply

About Stonegate Legal

Building & Construction

Debt Recovery / Collection

Civil / Personal Disputes

Defamation Litigations

1300 545 133

No Fee, No Obligation Case Evaluation

• Construction
• Insolvency Law & Restructuring
• Commercial Litigation
• Debt Recovery
• Corporate and Commercial Lawyers
• Commercial Property Lawyer
• Intellectual Property Lawyers
• Business Migration Lawyers
• Defamation and Injurious Falsehood Lawyers
• Wills and Estate Lawyer
• Immigration Lawyer
• Conveyancing
• Compensation Claims
• Defamation Lawyers
• RCR Difference
• Partnerships & Succession

Notices of Assignment of Debt – What they are and why they matter.

A notice of assignment of debt is required by Queensland law when a debt is assigned to a new creditor. Issued to the debtor, it essentially documents that the debt has been transferred from the old creditor (assignor) to a new one (assignee).  

It’s the new creditor’s responsibility to send the notice to ensure they:  

• Comply with the law – In Queensland, the notice of assignment of a debt should be in writing and comply with section 199 of the Property Law Act 1974 (QLD). Issuing such notice to the debtor is a precondition for the assignment becoming legally effective.  
• Protect their rights as a creditor – The notice of assignment needs to be issued before the new creditor can collect the debt. Failure to do so can result in the debtor continuing to make payments to the old debtor, which can lead to disputes and complications.  
• Protect the debtor’s rights – Letting the debtor know there’s a new creditor to whom they owe money avoids confusion and potential misdirection of funds.  
• Encourage transparency and maintain accurate records – Providing a notice of assignment fosters transparency in the debt collection process and helps maintain an accurate record of the debt’s status. This latter point is particularly important during a merger, ensuring a smooth transition and avoiding future complications.  

Is there a limitation period or anything else to be wary of?  

The Property Law Act 1974 (QLD) doesn’t specify an exact timeframe within which a new creditor must issue a debtor a notice of assignment of debt, but there are some important time considerations to keep in mind:  

• Prompt notification – Despite there being no explicit time limit, it’s generally recommended that the notice be provided promptly after the assignment has taken place. The key practical reason for this is to avoid the debtor making a repayment to the old creditor, which can make it tricky for the new assignee to recoup the money.  
• Limitation period for debt recovery – The Limitation of Actions Act 1974 (QLD) stipulates most debts have a limitation period of 6 years from the date the cause of action accrued (when the debt became due and payable). If legal action isn’t commenced within this period, the creditor can lose their right to recover the debt. Providing a timely notice of assignment ensures the assignee can take legal action to recover the debt if necessary, within the limitation period.  
• Continuing cause of action – For some debts, such as those arising from a periodic contract or instalment payments, each missed payment can create a new cause of action. In these cases, the limitation period restarts with each missed payment. However, it’s still important to provide a notice of assignment as soon as possible to avoid confusion and ensure proper debt management.  

So while there’s no specific limitation period for providing a notice of assignment of debt in Queensland, it’s important to ensure you receive repayments from the get-go and are able to fully recoup the debt within the limitation period for debt recovery (generally 6 years).  

If you need help drafting a notice of assignment of debt, or require general advice, our debt recovery law experts are here to help. Contact us today.   

The blog published by Rostron Carlyle Rojas Lawyers is intended as general information only and is not legal advice on any subject matter. By viewing the blog posts, the reader understands there is no solicitor-client relationship between the reader and the author. The blog should not be used as a substitute for legal advice from a legal practitioner, and readers are urged to consult RCR on any legal queries concerning a specific situation.  

Share Article:

Discuss Your Case Today

You’ll get a no-fee, no-obligation 30 minute consult with a lawyer

Related Articles

Construction Debt Recovery: Ensuring your Hard Work is Rewarded

• There are few things more frustrating for tradespeople in

Home and land packages and duplex construction

• As the property market continually increases, Home and Land

How To Avoid Bankruptcy Through A Debt Agreement: When and how Part IX of the Bankruptcy Act 1966 can be used

• Debt agreements are administered under Part IX of the

Stay up to date with our latest articles

BRISBANE OFFICE

Level 15/270 Adelaide St, Brisbane City QLD 4000

Email:  [email protected]

Phone: 07 3009 8444

Fax:  07 3009 8499

SYDNEY  OFFICE

Level 8/88 Phillip St, Sydney NSW 2000

Email: [email protected]

Copyright © 2021. All Rights Reserved | Rostron Carlyle Rojas Lawyers

Bankruptcy & Insolvency News SLF Lawyers News Is Your Notice Assignment of Debt Valid? May 25, 2020

A creditor (assignor) can transfer their rights to receive and seek payment of a debt to a third party (assignee). Once the transfer of their rights has occurred, the assignor can then seek payment of that debt from the debtor. Once assigned, the assignee has the legal right to such debt and has the power to give a good discharge of it  without the concurrence of the assignor. [1]

There are two factors that an assignee must consider before attempting to recover a debt from a debtor:

SERVICE OF THE NOTICE

The assignee must issue a notice of assignment of debt (“ Notice ”) to the debtor at the debtors last known residential address. This is where the confusion and issues around the service of the Notice can occur by the debtor. Generally, a bank will assign the debt to a collection company after years of attempting collection/locating debtor. It is at this stage that the debtor may have moved residential addresses and may not receive the Notice. The assignee is required to comply with section 347 of the  Property Law Act 1974  (Qld), whereby service of any notices must be made to the person’s last known place of abode.

STATUTE OF LIMITATIONS

An assignee must ensure that they are within the statue of limitations to legally commence recovery of the debt. The purpose of a statute of limitations is to limit the delay for creditors to take action against a debtor for outstanding monies. The limitation period for a contract debt is six (6) years, calculated from the point of breach. Where an assignee has been assigned a debt, the point of breach will commence from the date the debt was assigned to the assignee. However, in some circumstances, where a debtor acknowledges the debt or makes a payment in respect of the debt, the point of breach starts from the date of acknowledgement or the last payment made by the debtor.

SLF Lawyers specialises in legal recoveries and various enforcement options and can assist in providing advice with respect to ensuring the Notice has been issued correctly.

If you have any questions, please contact Partner – Mark Smith of SLF Lawyers Brisbane on (07) 3839 8011.

PRACTICE AREAS

• Building & Construction
• Commercial Litigation
• Alternative Dispute Resolution
• Estate Planning & Disputes
• Commercial Law
• Franchising & Licencing
• Bankruptcy & Insolvency
• Insurance Law
• Property Law
• Workplace Relations & Safety
• Banking & Finance

© 2022 SLF LAWYERS | ALL RIGHTS RESERVED | LIABILITY LIMITED BY A SCHEME APPROVED UNDER PROFESSIONAL STANDARDS LEGISLATION | DESIGNED AND BUILT BY NO STANDING

• News and insights
• Training services

Assignment of debts, statutory demands and offsetting claims

It is not uncommon for a creditor (assignor) to transfer their right to receive payment of a debt (assignment) to a third party (assignee). The assignee will then seek payment from the debtor.

The assignee of the debt can issue to the debtor company a statutory demand for the payment of the debt if the debt exceeds the statutory minimum, which is currently $2,000.

For the assignee issuing the statutory demand, there will be threshold issues as to whether notice of the assignment has been given to the debtor and whether appropriate details of the assignment are contained in the statutory demand.

Assignee has the same rights and obligations as the assignor

The assignee of the debt takes the assignment subject to the rights and obligations of the assignor.

This was demonstrated in the recent decision of Mascarene Pty Ltd v Slater [2016] VSC 395 relating to a building dispute.

In Mascarene a judgment debt was assigned and the assignee issued a statutory demand.

The Court held that the assignee was not prevented from seeking payment of interest as it had the same rights as the assignor, as if the assignment had not taken place.

However, the assignee also took the assignment subject to the obligations that would have applied to the assignor in respect of the debt.

In seeking to set aside the statutory demand the debtor company claimed it had an offsetting claim against the assignor for reinstatement costs relating to building works.

Although the assignee was not a party to the building contract and not personally liable for the reinstatement costs, the debtor company was successful in claiming the setoff and reducing the amount of the statutory demand by the amount of the reinstatement costs.

It is clear that an offsetting claim cannot be sidestepped by assigning the debt.

The assignee of a debt receives the benefit of the debt subject to the rights of the assignor but also subject to the assignor’s obligations in respect of the debt.

A statutory demand can be issued in respect of an assigned debt however the assignment does not prevent the debtor company from disputing the existence or amount of the alleged debt or seeking to raise an offsetting claim.

If you would like more information about these issues, please contact Graham Roberts on +61 7 3231 2404.

Like this article? Share it via:

This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please let us know.

Stay up to date with CGW

Subscribe to our interest lists to receive legal alerts, articles, event invitations and offers.

Key contacts

Areas of expertise

The right to disconnect: what does this mean for my workplace?

Podcast: Coffee with CGW – Get to know Greg Thorne

Podcast: TaxLand with Fletch and Sarah – Understanding the ATO’s new guidance on section 99B applying to distributions of capital from trusts

Acknowledgment of country.

Cooper Grace Ward acknowledges and pays respect to the past, present and future Traditional Custodians and Elders of this nation and the continuation of cultural, spiritual and educational practices of Aboriginal and Torres Strait Islander peoples.

Quick Links

• Client hubs

Customer Service

• Global connections
• Online payments
• Security notice

Fast, accurate and flexible entities including companies, self-managed superannuation funds and trusts.

Connect with us

• Level 21/400 George Street, Brisbane, QLD Australia
• +61 7 3231 2444
• [email protected]
• Terms and conditions
• Privacy policy
• Privacy collection statement
• CGW team login

199 Statutory assignments of things in action

(1) Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal thing in action, of which express notice in writing has been given to the debtor, trustee or other person from whom the assignor would have been entitled to claim such debt or thing in action, is effectual in law (subject to equities having priority over the right of the assignee) to pass and transfer from the date of such notice— (a) the legal right to such debt or thing in action; and

(b) all legal and other remedies for the same; and

(c) the power to give a good discharge for the same without the concurrence of the assignor.

(2) If the debtor, trustee or other person liable in respect of such debt or thing in action has notice— (a) that the assignment is disputed by the assignor or any person claiming under the assignor; or

(b) of any other opposing or conflicting claims to such debt or thing in action;

LawLive ®

- Assignment of Debt

Assignment of debts, statutory demands and offsetting claims

Contributor.

It is not uncommon for a creditor (assignor) to transfer their right to receive payment of a debt (assignment) to a third party (assignee). The assignee will then seek payment from the debtor.

The assignee of the debt can issue to the debtor company a statutory demand for the payment of the debt if the debt exceeds the statutory minimum, which is currently $2,500.

For the assignee issuing the statutory demand, there will be threshold issues as to whether notice of the assignment has been given to the debtor and whether appropriate details of the assignment are contained in the statutory demand.

Assignee has the same rights and obligations as the assignor

The assignee of the debt takes the assignment subject to the rights and obligations of the assignor.

This was demonstrated in the recent decision of Mascarene Pty Ltd v Slater [2016] VSC 395 relating to a building dispute.

In Mascarene a judgment debt was assigned and the assignee issued a statutory demand.

The Court held that the assignee was not prevented from seeking payment of interest as it had the same rights as the assignor, as if the assignment had not taken place.

However, the assignee also took the assignment subject to the obligations that would have applied to the assignor in respect of the debt.

In seeking to set aside the statutory demand the debtor company claimed it had an offsetting claim against the assignor for reinstatement costs relating to building works.

Although the assignee was not a party to the building contract and not personally liable for the reinstatement costs, the debtor company was successful in claiming the setoff and reducing the amount of the statutory demand by the amount of the reinstatement costs.

It is clear that an offsetting claim cannot be sidestepped by assigning the debt.

The assignee of a debt receives the benefit of the debt subject to the rights of the assignor but also subject to the assignor's obligations in respect of the debt.

A statutory demand can be issued in respect of an assigned debt however the assignment does not prevent the debtor company from disputing the existence or amount of the alleged debt or seeking to raise an offsetting claim.

Winner – EOWA Employer of Choice for Women Citation 2009, 2010, 2011 and 2012 Winner – ALB Gold Employer of Choice 2011 and 2012 Finalist – ALB Australasian Law Awards 2008, 2010, 2011 and 2012 (Best Brisbane Firm) Winner – BRW Client Choice Awards 2009 and 2010 - Best Australian Law Firm (revenue less than $50m)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Litigation, Mediation & Arbitration

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

• Judicial appointments

Queensland Courts

Order for payment by instalments.

This is an order—not a warrant. You would usually seek an order for payment by instalments when you want the enforcement debtor to pay you in regular amounts over a period of time.

Unless the court grants leave, you must apply for the order within six years of the date of the judgment debt.

Applying for the order

• File Form 82 - Order authorising payment by instalments (DOC, 33.0 KB) with Form 9 - Application (UCPR) (DOC, 45.5 KB) . Provide a copy to the enforcement debtor.
• the date and amount of the money order
• the date and amount of any payment made under the order
• the costs incurred in previous enforcement proceedings
• any interest due on the date the statement is sworn and the daily amount accruing after that date
• any other details necessary to calculate the amount payable under the order on the date the statement is sworn, and show how the amount is calculated.

What the court considers

The court will consider additional factors, including:

• whether the debtor is employed
• the debtor’s means of paying the money
• whether the debt will be paid within a reasonable time
• the debtor’s living expenses and liabilities
• the appropriateness of this method compared to others
• whether there will be unreasonable hardship for the debtor.

The warrant time frame

The order remains in force until:

• the debt is paid
• the debt is set aside
• an order is made
• the debtor defaults on two consecutive payments.

Once in place, no enforcement warrant can be issued against the enforcement debtor.

• @SupremeCourtQLD
• @DistCourtQLD
• @MagsCourtQLD
• Social media disclaimer

Queensland Law Handbook Online

Your Practical Guide to the Law in Queensland

Going to the Tribunal or Court for Debt Disputes

Last updated 28 November 2016

When a person fails to pay a debt, or where there is a genuine dispute about whether a debt is owed and in what amount, the courts may determine whether the debt must be paid.

Court action can be time consuming and expensive. It is also possible to deal with debt problems or disputes through mediation or informal settlement discussions. Dispute Resolution Centres of Queensland offer free, confidential and voluntary mediation services.

Time limits

Court proceedings for the recovery of a debt must be commenced within six years from the date when the debt first arose (s 10  Limitation of Actions Act 1974 (Qld) ). If a written acknowledgement that a debt is owing has been given or part-payment of a debt has been made, this will extend the time limit for commencing court proceedings.

A debtor should not pay a debt that is more than six years old without first seeking legal advice.

Which court?

The appropriate tribunal or court in which to bring proceedings will depend on the amount of the debt. For debts of $150 000 or less, proceedings may be brought in the Magistrates Court.

The Queensland Civil and Administrative Tribunal (QCAT) has jurisdiction to hear minor debt claims of up to $25 000. Tribunal procedures are simpler, cheaper and quicker than other civil court proceedings and are designed to be navigated without legal representation.

For debts of $150 000 to $750 000, proceedings may be brought in the District Court.

For debts of more than $750 000, proceedings may be brought in the Supreme Court (see The Court System chapter).

Tribunal and court proceedings to recover a debt

Court procedure in QCAT is governed by the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act) and the Queensland Civil and Administrative Tribunal Rules 2009 (Qld)  (QCAT Rules). Court procedure in the civil courts is governed by the Uniform Civil Procedure Rules 1999 (Qld) (UCP Rules).

Although the forms and terminology differ slightly, the process for commencing a claim for a debt is similar in QCAT and the civil courts.

The process for commencing a claim in QCAT or the courts is demonstrated in the diagram below.

(Click image to see full size.)

Court and registry staff can provide copies of relevant forms and information about the filing fee.

Starting debt recovery proceedings in the tribunal or court

When a creditor commences proceedings to recover a debt, the QCAT application or court claim must include details about:

• when the debt was entered into
• who the parties to the debt are
• what the creditor provided in return for the debt
• what agreement there was about payment of the debt
• whether the agreement was written or verbal
• what the amount of the debt was
• what payments the creditor has received for the debt.

The QCAT application or court claim must be filed with the court registry, and then served upon the debtor. After a QCAT application or a court claim is served, a debtor has 28 days to respond. It is advisable to obtain legal advice within this 28-day period.

Default judgment

If the strict 28-day deadline passes and the debtor has not paid the money owing or filed a response, then the creditor can apply for a default judgment.

Unless the debtor agrees entirely with the creditor’s allegations about the amount of money owed (including costs and interest), it is essential that the debtor responds to the application or claim within 28 days of being served.

An informal agreement with a creditor to settle a debt does not safeguard the debtor against a default judgment. If a settlement is negotiated, it should be set out in writing and include a term that the creditor will immediately discontinue the court proceedings against the debtor.

The QCAT or court registry staff can provide the forms for making an application for default judgment . The creditor will provide a sworn statement about the debt and about service of the claim on the debtor. The application can be made without giving any notice to the debtor.

When a creditor makes an application for default judgment, an order can be made for immediate payment of the full amount of the claim, plus interest and costs. The debtor does not have to be present for this decision to be made. A debtor will be notified of the order in writing that a default judgment has been made by the court. If the debtor fails to pay the judgment amount within the time allowed in the order, the creditor can take action to enforce the judgment debt (see Recovering a Judgment Debt ).

If a creditor obtains default judgment when the defendant has good reason for not filing a defence or after agreeing to alternative arrangements for payment of the debt, the debtor should immediately apply to have the judgment set aside (s 51 QCAT Act ). Provided the defendant can satisfy the judge or tribunal member that the defendant has a good defence or that a private agreement for payment has been made and that the defendant has not defaulted on any obligations under the agreement, the default judgment would usually be set aside. If an agreement is made, the debtor should always keep a written record of the terms of the agreement and request receipts as proof of payment.

Share or Print

• Click to share on Facebook (Opens in new window)
• Click to share on Twitter (Opens in new window)
• Click to share on Pinterest (Opens in new window)
• Click to share on LinkedIn (Opens in new window)
• Click to share on Tumblr (Opens in new window)
• Click to share on Reddit (Opens in new window)
• Click to print (Opens in new window)

• Already have a WordPress.com account? Log in now.
• Subscribe Subscribed
• Copy shortlink
• Report this content
• View post in Reader
• Manage subscriptions
• Collapse this bar

Skip links and keyboard navigation

• Skip to content
• Use tab and cursor keys to move around the page (more information)

Popular services

• Renew vehicle or boat rego
• Check my licence demerit points
• Renew my driving licence
• Change my address

Browse by category

• Transport and motoring
• Employment and jobs
• Education and training
• Queensland and its government

Make a claim for financial loss

You can claim for financial loss against property or letting agents, motor dealers, debt collectors, auctioneers or their employees.

Always try to settle the claim with the agent or dealer first . Go through their complaint process. If this doesn’t resolve the dispute, then you can lodge a written claim with us. Don’t leave it too long to make your claim as time limits apply.

How to make a claim

Download and complete the Claim against the claim fund form . Lodge the completed claim with the Office of Fair Trading by:

• emailing [email protected]
• posting to: Claims and Recoveries Office of Fair Trading GPO Box 3111 BRISBANE  QLD  4001

Provide as much information about the agent or dealer as possible.

It’s free to lodge a claim for financial loss with us.

Make a marketeering claim against property agents

Marketeering claims only apply to property agents. To make a marketeering claim you must:

• submit a Notice of intention to claim for a marketeering contravention form within 1 year of signing the contract to give us notice of your intention to claim in the future
• sell your property within 6 years of signing the contract
• submit the Claim against the claim fund form after you sell the property.

You can’t make a claim about marketeering if you still own the property.

Identify the agent or dealer

You’ll need to tell us who you’re claiming against. Be aware that a business name is not always the legal entity.

Search the ASIC business names register to find out the registered name of the proprietor—this might be a person or a company. Basic searches are free, but you’ll need to pay for more detailed information.

On the claim form write the business name in this format:

• ABC Pty Ltd trading as XYZ Realty (if it is a company)
• John Smith trading as XYZ Realty (if it is a sole trader or partnership).

Claim within the time limit

You must lodge a claim:

• within 1 year of becoming aware of your loss
• no more than 3 years after the event.

We will decide if you lodged your claim in time.

If you need more time, you can ask for an extension from the  Queensland Civil and Administrative Tribunal (QCAT).

Claims involving legal proceedings

If you’re involved in legal proceedings that relate directly to the event you can lodge a claim at the end of those proceedings. This only applies:

• to regular claims
• if the proceedings started within the time limit to lodge a regular claim
• if you lodge the claim within 3 months after the end of the proceedings.

More information

Find out how we process your claim .

• 1300 793 226
• Debt Collection
• Credit Management
• Building & Construction Debt
• Legal Action
• Online Debt Submission
• Debt Purchasing
• Privacy & Disclosure
• FAQ’s
• Submit your Debt

hawt glamorous chick. milfs

I have received a Notice of Assignment from you – what does this mean?

PRS periodically purchase, generally from credit providers, those debts which they no longer wish to pursue (for a variety of reasons).

The Notice of Assignment is a legal document explaining to you what debt was assigned to PRS and advising of the new ownership of that debt.

BB Recoveries

• Level 7, Suite 7b, 371 Queen Street Brisbane QLD 4000
• Phone 1300 793 226
• Privacy and Disclosure

Copyright 'BB Recoveries

• Log in to QRO Online
• QRO Online help
• Payroll tax
• Betting tax
• Public Ruling DA010.2.1 Transfers of secured and unsecured debts

Transfers of secured and unsecured debts

A public ruling, when issued, is the published view of the Commissioner of State Revenue (the Commissioner) on the particular topic to which it relates. It therefore replaces and overrides any existing private rulings, memoranda, manuals and advice provided by the Commissioner in respect of the issue(s) it addresses.

Where a change in legislation or case law (the law) affects the content of a public ruling, the change in the law overrides the public ruling—that is, the Commissioner will determine the tax liability or eligibility for a concession, grant or exemption, as the case may be, in accordance with the law.

What this ruling is about

• This Public Ruling clarifies the circumstances under which a transfer, or agreement for the transfer, of secured and unsecured debts will be dutiable under the Duties Act 2001 (the Duties Act).

Ruling and explanation

• Debts may be unsecured or secured.
• It will be a dutiable transaction only if the debt is a Queensland business asset. A debt of a business is a business asset if the debtor resides in Queensland. 1
• The dutiable transaction will be a transfer, or agreement for the transfer, of dutiable property being a Queensland business asset. 2
• Duty will not apply if the transfer, or agreement for the transfer, is of a corporate debt security. 3
• It will be a dutiable transaction if the security is over dutiable property.
• The dutiable transaction will be the transfer, or agreement for the transfer, of dutiable property being an existing right. 4
• This will be the case even if the debt is also a Queensland business asset. 5
• Nominal duty of $5 will apply if the security is a mortgage over land and certain other conditions are satisfied. 6
• a mortgage-backed security 7
• a mortgage or pool of mortgages for creating, issuing, marketing or securing a mortgage-backed security. 8  This exemption applies from 28 November 2002. 9 A transfer, or agreement for transfer, of a mortgage or pool of mortgages before that date would be dutiable at the rate set out in s.24(3) or (4) 10 of the Duties Act.
• an asset-backed security 11 or
• a financial asset or pool of financial assets for creating, issuing, marketing or securing an asset-backed security. 12

Date of effect

• This Public Ruling takes effect from the date of issue.

David Smith Commissioner of State Revenue Date of issue: 24 February 2009

• Section 35(1)(f) of the Duties Act
• Sections 9(1)(a) or (b) of the Duties Act, as the case may be, and s.10(1)(d) of the Duties Act
• Section 148(b) and the definition of corporate debt security in the Dictionary in Schedule 6 of the Duties Act
• Sections 9(1)(a) or (b), 10(1)(c) and paragraph (h) of the definition of existing right in the Dictionary in Schedule 6 of the Duties Act
• Sections 10(1)(d) and 35(1)(f) of the Duties Act
• Section 24(1) of the Duties Act
• Defined in s.286 of the Duties Act. These securities are not existing rights; see the definition of existing right in the Dictionary in Schedule 6 of the Duties Act.
• Section 130I(1) of the Duties Act
• Date of assent of Revenue Legislation Amendment Act 2002
• As in force prior to 1 January 2007—the commencement date of s.18 of the Revenue and Other Legislation Amendment Act 2006 .
• Section 130H(1)(a) of the Duties Act
• Section 130H(1)(b) of the Duties Act